Government IT Savings Success – Time to Open the Piggy Bank…Carefully

Australia’s Finance Minister Lindsay Tanner recently heralded the Gershon Review and resultant reforms by Federal Government as a success. A review into the efficiency and effectiveness of IT, Gershon recommended cost reductions, program management rigor and the use of Commercial Off the Shelf (COTS) products amongst other significant cultural and operational changes. Minister Tanner has confirmed that approximately $430 million of savings have been reaped from Business As Usual (BAU) IT spending in Federal Government. But this is only part of the equation… development, management and delivery of new capability using agile methods and class-leading COTS products are still yet to become pervasive. So what does that mean: a success only in part? Perhaps. What is clear is that it is time to reinvest in the right capabilities.

Gershon identified that in order to change Federal Government ICT, the re-investment of half of all savings harvested would be key in future successes. The estimated ~$215m will be a welcome injection into the ICT economy which has seen a significant pull-back from Federal Government since Gershon’s recommendations were tabled in 2008. So for many ICT …

Australia’s Finance Minister Lindsay Tanner recently heralded the Gershon Review and resultant reforms by Federal Government as a success. A review into the efficiency and effectiveness of IT, Gershon recommended cost reductions, program management rigor and the use of Commercial Off the Shelf (COTS) products amongst other significant cultural and operational changes. Minister Tanner has confirmed that approximately $430 million of savings have been reaped from Business As Usual (BAU) IT spending in Federal Government. But this is only part of the equation… development, management and delivery of new capability using agile methods and class-leading COTS products are still yet to become pervasive. So what does that mean: a success only in part? Perhaps. What is clear is that it is time to reinvest in the right capabilities.

Gershon identified that in order to change Federal Government ICT, the re-investment of half of all savings harvested would be key in future successes. The estimated ~$215m will be a welcome injection into the ICT economy which has seen a significant pull-back from Federal Government since Gershon’s recommendations were tabled in 2008. So for many ICT organisations, 2010/11 is expected to be an exciting year to be working with Australian Federal Government.

Caution is advised, however. Cracking open the piggy bank to spend on home-grown applications using the minds and architectures of the past could be a perilous path. Similarly, COTS products that are untested, ill-proven and bought for the wrong reasons will not go unnoticed. Government needs to take the Gartner Magic Quadrants for each specific IT segment and actively engage the leading organisations, best in class, to take them into the new world. Federal Government agencies have to take the right advice from the right people to build the right capabilities. There will be many ICT organisations looking to ride on any waves made by Federal Government ICT reinvestment in the 2010/11 financial year.

Agencies should be very cautious, particularly in the data warehousing, data integration, business intelligence and analytics market. These are decision-enabling technologies for both strategic and operational arms of the organisation. Gershon was a somewhat innocuous refocusing of Government ICT; a cultural change exercise that gave Government the time it needed to respond. Tanner’s announcement reminds us that there are new expectations – build efficient and effective capabilities, responsibly, transparently and defensibly. Spending public monies is indeed a privilege and providing insight into capability-building projects, outcomes and return on investment will be more than just a new trend but a given. Accounting for expenditure and measuring value, not just defending it, will become par for the course. Being able to report on projects mid-stream, make early decisions to “go/no-go” and evaluate project success are again capabilities that will support the project management rigor being demanded off the back of the Gershon Review. If your Government organisation does not have this capability now, it will only be a matter of time before it is politely requested – then required.

Buying, implementing and deploying COTS technologies that enable the wrong decision or do not deliver in a timely fashion will be inexcusable. Gershon brings about a new period of accountability and transparency which is a new Western Democratic mantra from Parliament House through to Whitehall, the Reichstag and the White House. Enabling capabilities to make better decisions in-time resulting in a valued difference empowers governments and public servants to act with confidence and account for decisions with fact. The game for the Federal Government has now changed and those who are best informed and have agile intelligence to support decisions on policy, service delivery and reforms will win the day.

Government agencies that choose partners like Teradata with COTS products, local expertise, a proven government track-record and contracts that can be leveraged for economic efficiencies will be achieving the Gershon vision. I would welcome contact from any government agency that need insights into operations and measurement of strategy; that will be all of you. Building an efficient and effective information capability will stand the Gershon test and enable insights and measurement performance and expenditure of public monies in a new government epoch of transparency.